EXHIBIT
4.2


 


SELLER LOCK-UP AGREEMENT


 


WJ Communications, Inc.


401 River Oaks Parkway


San Jose, CA 95134


 


	
  Re:

  	
   

  	
  Asset Purchase Agreement dated as of June 3, 2004 (as amended,
  supplemented or otherwise modified from time to time, the “Agreement”),
  between WJ Communications, Inc. (the “Company”), EiC Corporation (“EiC”)
  and EiC Enterprises Limited (“EiC Enterprises” and together, the “Parties”)

  



 


Ladies and Gentlemen:


 


1.                                       In
order to induce the Company to consummate the transactions provided for in the
Agreement, each of the undersigned agrees that it will not, without the
Company’s prior written consent, directly or indirectly, offer, offer to sell,
sell, loan, pledge, grant any rights, contract to sell or grant any option to
purchase or otherwise dispose or transfer (collectively, “Dispose,” or a
“Disposition”) any shares of Company common stock (“Common Stock”) issued or
distributed to the undersigned pursuant to the Agreement except as set forth on
Schedule A with respect to the issuance of Common Stock to EiC and
EiC Enterprises at Closing (the “Closing Payment Shares”), Schedule B
with respect to the issuance of shares to EiC Enterprises as part of the Escrow
Deposit, as defined in the Agreement (the “Escrow Deposit Shares”), and Schedule C
with respect to the issuance of Common Stock to EiC as part of the Earnout
Payments, as defined in the Agreement (the “Earnout Payment Shares”), provided,
however, that EiC may distribute the Earnout Payment Shares to EiC Enterprises
without the Company’s prior written consent. 
The Closing Payment Shares, Escrow Deposit Shares and Earnout Payment
Shares are hereinafter collectively referred to as the “Shares.”


 


2.                                       The
foregoing restrictions are also expressly intended to preclude the undersigned
from engaging in any hedging or other transaction which is designed to or is
reasonably expected to lead to or result in a Disposition of Shares during the
lock-up periods reflected on the Schedules attached hereto even if such
securities would be Disposed of by someone other than the undersigned.  Such prohibited hedging or other
transactions include without limitation any short sale (whether or not against
the box) or any purchase, sale or grant of any right (including without
limitation any put or call option) with respect to any securities that include,
relate to or derive any significant part of their value from the Shares.


 


3.                                       Each
of the undersigned hereby agrees
and consents to
the entry of stock transfer instructions with the Company’s transfer agent
against the transfer of the Shares except those transferred in compliance with
this agreement and the placement of the following legends on the Shares:


 

















 


“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS.


 


TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY
A LOCKUP AGREEMENT.”


 


4.                                       Each
of the undersigned confirms
that it understands
that the parties will rely upon the representations set forth in this agreement
in proceeding with the consummation of the transactions provided for in the
Agreement.  This agreement shall be
binding on each of the undersigned and its respective successors, heirs, personal
representatives and assigns.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
  Date: June 18, 2004

  	
   

  
	
   

  	
   

  
	
   

  	
  EiC Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Nicky Lu

  
	
   

  	
  Name:

  	
  Nicky Lu

  
	
   

  	
  Title:

  	
   

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EiC Enterprises”

  
	
   

  	
   

  
	
   

  	
  EiC Enterprises
  Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Nicky Lu

  
	
   

  	
  Name:

  	
   Nicky Lu

  
	
   

  	
  Title:

  	
   

  	
  Chairman and Chief Executive Officer

  
						



 


 


SIGNATURE PAGE TO SELLER LOCK-UP AGREEMENT


 

















 


Schedule A


 


Closing
Payment Shares


 


The Company will issue to EiC 184,250 shares of Common Stock (the “EiC
Shares”) and EiC Enterprises 258,632 shares of Common Stock (the “EiC
Enterprises Shares”) on the Closing Date. 
EiC is permitted to Dispose of the EiC Shares after the Closing Date to
certain employees of the Company pursuant to the Change of Control Agreements
of even date herewith by and between EiC and such employees (the “Change of
Control Agreements”), provided, however, that such employees shall not Dispose
of any of the EiC Shares until the registration of the EiC Shares becomes
effective pursuant to the Registration Rights Agreement by and between the
Company, EiC and EiC Enterprises of even date herewith (the “Registration
Rights Agreement”) or until the shares become tradable pursuant to Rule 144.


 


Notwithstanding that the resale of the EiC Enterprises Shares will be
registered in accordance with the terms of the Registration Rights Agreement,
EiC Enterprises shall not Dispose of the EiC Enterprises Shares until 90 days
after the registration of the EiC Enterprises Shares becomes effective, and
further, EiC Enterprises shall not Dispose of more than 184,250 EiC Enterprises
Shares in any 90-day period after the registration of the EiC Enterprises
Shares becomes effective.  These
restrictions shall expire one year from the effective date of registration of
the EiC Enterprises Shares after which there shall be no restrictions on the
Disposition by EiC Enterprises of the EiC Enterprises Shares.


 


The following table illustrates the foregoing and assumes that the
registration of the Closing Payment Shares will not become effective until six
months after the Closing Date and that the periods correspond to fiscal
quarters.  If the registration of the
Closing Payment Shares becomes effective before such date in Q2, then the periods
below shall be interpreted as 90-day periods and not fiscal quarters and Q2
shall be deemed to end on the date that the registration of the Closing Payment
Shares becomes effective.  If the
registration of the Closing Payment Shares becomes effective after six months
after the Closing Date, then the periods below shall be interpreted as 90-day
periods and not fiscal quarters and the quarter in which the registration of
the Closing Shares becomes effective shall be deemed to end on the date the
registration of the Closing Payment Shares becomes effective.


 


	
   

  	
   

  	
  Period in
  which Disposition of

  Closing Payment Shares May be Made and

  Number of Shares which may be Disposed in such Period

  	
   

  
	
  Name of Seller

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q5

  	
   

  	
  Q6

  	
   

  	
  Q7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EiC Enterprises

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  0

  	
   

  	
  184,250

  	
   

  	
  184,250

  	
   

  	
  184,250

  	
   

  	
  No restriction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EiC Employees

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  184,250

  	
   

  	
  No restriction

  	
   

  	
  No restriction

  	
   

  	
  No restriction

  	
   

  	
  No restriction

  	
   

  



 

















 


Schedule B


 


Escrow
Deposit Shares


 


At Closing, the Company is depositing 294,118 shares of Common Stock
into escrow pursuant to the terms of the Escrow Agreement by and between the
Company, EiC, EiC Enterprises and the escrow agent dated the Closing Date (the
“Escrow Agreement”).  To the extent that
the Escrow Deposit Shares are distributed to EiC Enterprises pursuant to the
terms of the Escrow Agreement, and notwithstanding that EiC Enterprises would
otherwise be eligible to Dispose of the Escrow Deposit Shares under Rule 144,
EiC Enterprises shall not Dispose of more than half of the Escrow Deposit
Shares in any 90-day period after the termination of the Escrow Agreement. This
restriction shall terminate 180 days after the termination of the Escrow
Agreement.


 


The following table illustrates the foregoing and assumes that all of
the Escrow Deposit Shares will be distributed to EiC Enterprises pursuant to
the terms of the Escrow Agreement.


 




	
   

  	
   

  	
  Period in
  which Dispositions of

  Escrow Deposit Shares may be

  Made and Number of Shares which

  may be Disposed in such Period

  	
   

  
	
  Name of Seller

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EiC Enterprises

  	
   

  	
  147,059

  	
   

  	
  147,059

  	
   

  	
  No restriction

  	
   

  






 

















 


Schedule C


 


Earnout
Payment Shares


 


The Company will issue to EiC Earnout Payment Shares in two
installments after the Closing Date to the extent earned by EiC pursuant to the
Agreement and at the times set forth in the Agreement.  EiC may Dispose of the Earnout Payment
Shares pursuant to the Change of Control Agreements and to EiC Enterprises
after the date that the Earnout Payment Shares are issued to EiC.  There will be no restriction on the
Disposition by the Distributees (as defined in the Change of Control
Agreements) of the Earnout Payment Shares received by them pursuant to the
Change of Control Agreements. 
Notwithstanding that EiC (or EiC Enterprises if EiC distributes the
Earnout Payment Shares to it) would otherwise be eligible to Dispose of the
Earnout Payment Shares under Rule 144, EiC (or EiC Enterprises if EiC
distributes the Earnout Payment Shares to it) shall not Dispose of more than
twenty five percent of the Earnout Payment Shares, less the percentage of
Earnout Payment Shares Disposed by EiC pursuant to the Change of Control
Agreements, until 90 days after the Earnout Payment Shares are issued to EiC
(the “Initial Period”), further EiC (or EiC Enterprises if EiC distributes the
Earnout Payment Shares to it) shall not Dispose of more than 25 percent of the
Earnout Payment Shares in any 90-day period after the Initial Period.  These restrictions shall expire one year
from the date of the issuance of the Earnout Payment Shares to EiC after which
there shall be no restrictions on the Disposition by EiC (or EiC Enterprises if
EiC distributes the Earnout Payment Shares to it) of the Earnout Payment
Shares.


 


The following table illustrates the foregoing and applies to both of
the periods in which Earnout Payment Shares will be issued to EiC if and to the
extent earned by EiC pursuant to the Agreement.


 


	
   

  	
   

  	
  Period in
  which Dispositions of

  Earnout Payment Shares may be made and percentage of Shares which

  may be Disposed in such Period

  	
   

  
	
  Name of Seller

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EiC or EiC Enterprises

  	
   

  	
  25*

  	
   

  	
  25

  	
   

  	
  25

  	
   

  	
  25

  	
   

  	
  No restriction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Employees of EiC

  	
   

  	
  100

  	
   

  	
  No restriction

  	
   

  	
  No restriction

  	
   

  	
  No restriction

  	
   

  	
  No restriction

  	
   

  



 












* Less the percentage of Earrnout Payment
Shares Disposed of by EiC pursuant to the Change of Control Agreements.